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paid to Cooper in exchange for Ford’s awarding contracts to the
Zachova entities. See also Diamond v. Commissioner, 56 T.C. 530,
541 (1971), affd. 492 F.2d 286 (7th Cir. 1974); Ball v.
Commissioner, T.C. Memo. 1984-218; Shaara v. Commissioner, T.C.
Memo. 1980-247. Petitioner and Sova, on behalf of the Zachova
entities, had agreed with Cooper to pay him bribes as a
precondition to Ford’s award of the contracts, and petitioner,
pursuant to a concerted plan, used part of the money that he
received from the false invoice scheme to satisfy that agreement.
Although respondent observes correctly that petitioner actually
possessed the bribe money, we disagree with respondent’s
conclusion drawn therefrom that this possession allowed
petitioner to do whatever he wanted with that money. To be sure,
the Zachova entities wanted the contracts, the Zachova entities
had to bribe Cooper to get the contracts, the Zachova entities
(through petitioner and Sova) agreed with Cooper to pay him his
bribes in return for the contracts, and petitioner and Sova, as
officers and agents of the Zachova entities, used the Zachova
entities’ money to pay Cooper the bribes which, in turn, allowed
the Zachova entities to receive the Ford contracts. Because
petitioner received the bribe money from the Zachova entities as
a mere intermediary, or “conduit”, between them and Cooper,
petitioner is not taxed on his “receipt” of that money.
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